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Laborers' Pension Fund v. Salute Concrete, Inc.

United States District Court, Seventh Circuit

August 30, 2013

LABORERS' PENSION FUND and LABORERS' WELFARE FUND OF THE HEALTH AND WELFARE DEPARTMENT OF THE CONSTRUCTION AND GENERAL LABORERS' DISTRICT COUNCIL OF CHICAGO AND VICINITY, and JAMES S. JORGENSEN, Administrator of the Funds Plaintiffs,
v.
SALUTE CONCRETE, INC., Defendant.

PLAINTIFFS' MOTION FOR PROVE-UP OF DAMAGES

MILTON I. SHADUR, District Judge.

Plaintiffs, the Laborers' Pension Fund and Laborers' Welfare Fund of the Health and Welfare Fund of the Health and Welfare Department of Construction and General Laborers' District Council of Chicago and Vicinity, and James S. Jorgensen, Administrator of the Funds (the "Funds"), by their attorneys, hereby move for judgment of damages in sum certain against defendant, Salute Concrete, Inc., (the "Company"), pursuant to Rule 55 of the Federal Rules of Civil Procedure. In support of this Motion, plaintiffs by and through their attorneys state:

1. On January 17, 2013, plaintiffs filed a complaint under Sections 502(e)(1) and (2) of the Employee Retirement Income Security Act, as amended, 29 U.S.C. §1132(e)(1) and (2); Section 301(a) of the Labor Management Relations Act, as amended, 29 U.S.C. §185(a); and 28 U.S.C. §1331 alleging that at all material times defendant, Salute Concrete, Inc. (the "Company"), has an obligation, arising from a collective bargaining agreement to make contributions to plaintiffs' Funds, to submit to an audit upon demand and to obtain and maintain a surety bond. In this Complaint, plaintiffs specifically alleged that defendant failed to report and pay contributions from October 1, 2012 to the present. Plaintiffs requested relief included producing books and records for an audit upon plaintiffs' request.

2. On February 28, 2013, the Court granted plaintiffs' motion for default.

3. The Company's president, Thomas Saviano, agreed to comply with the Funds' selected auditors from the Firm of Richard J. Wolf and Company, Inc., that performed a payroll audit as required by the Collective Bargaining Agreement, which was attached to the Complaint (See, Dk#1).

4. As established by the Funds' Field Department Representative, James Fosco, the Funds' auditors reviewed the defendant's records that reflected contributions due to the Funds for the period covering June 6, 2012 through February 28, 2013. A letter and a copy of the auditors' report was sent to the Company with a deadline for presenting any objections to the audit report. The Company did present objections as well as further documentation, and, after due consideration, the Funds agreed to accept some of the Company's challenges. The audit was revised to reflect these adjustments. Thus, the auditors' revised report of August 20, 2013, reflects principal contributions owed to the Welfare, Pension, Training, LMCC, CCA, and LECET funds, and for Union dues in the total amount of $14, 369.95, as well as accumulated late penalties in the amount of $2, 692.30. (See, James Fosco Affidavit, Exhibit A, ¶2-3; the Audit Report, Exhibit B).

5. According to the Collective Bargaining Agreement and the respective Trust Agreements to which the defendant is bound, payment is also owed for liquidated damages in the amount of 20% (twenty percent) of the unpaid or late contributions to the Welfare, Pension, and Training funds, and 10% (ten percent) of the principal amount of delinquent contributions to the LMCC, CCA and LECET funds, and for Union dues. Additionally, interest is calculated at twelve percent and is owed for all delinquencies. As established by the affidavit of Mr. Fosco the liquidated damages owed to the Welfare, Pension and Training funds amount to $2, 727.29, and the liquidated damages to the LMCC, CCA and LECET funds, and for Union dues, amount to $73.35. Interest is due in the amount of $1, 563.00 (See, Fosco Affidavit, Exh. A, ¶4-5). These amounts are further detailed in the summary reports prepared by Mr. Fosco in this matter that are attached as Exhibit C.

6. The cost of the audit billed to the Funds was $600.00, which the defendant is also obligated to pay, based on the respective Trust Agreements to which they are bound. (Fosco Affidavit, Exh. A, ¶7; Audit Report, Exh. B).

7. Plaintiffs are entitled to attorneys' fees and costs under ERISA, 29 U.S.C.§1132(g)(2)(B). The attached affidavit of Sara Stewart Schumann establishes the amount of attorneys' fees incurred in this matter are $4, 480.00 and $420.00 in costs, consisting of service of process and filing fees (See, Sara Stewart Schumann Affidavit, Exhibit D; Fee Report, Exhibit D1).

WHEREFORE, plaintiffs request entry of judgment against the defendant, Salute Concrete, Inc., requesting that the Court order judgment in a total amount of $26, 925.89 to be entered. Further, plaintiffs request the Court's order specify that, should the defendant resume operations, the Company must report hours of covered employees on a monthly basis and pay current contributions as they become due as required under the collective bargaining agreement, and the Company must provide written proof that it has obtained a surety bond to plaintiffs' counsel, Sara S. Schumann, Esq., Allison, Slutsky & Kennedy, P.C., 230 W. Monroe Street, Suite 2600, Chicago, IL 60606.

Exhibit A

AFFIDAVIT OF JAMES FOSCO

James Fosco, being first duly sworn on oath, deposes and states as follows:

1. 1 am a Field Representative of the Field Department, employed by the Laborers' Pension Fund and Laborers' Welfare Fund of the Health and Welfare Department of the Construction and General Laborers' District Council of Chicago and Vicinity (the "Funds"), the plaintiffs in the above referenced action. My responsibilities include oversight of collection of amounts owed by Salute Concrete, Inc. (the "Company"), which has been a signatory employer since tune 6, 2012. A copy of the Company's Collective Bargaining Agreement was attached to the Complaint in the above captioned lawsuit. This affidavit is submitted in support of the Funds' motion for damages against the Company.

2. The Funds' auditors of the firm of Richard J. Wolf & Company, Inc., reviewed the Company's records for the audit period covering June 6, 2012 through February 28, 2013. The auditors' findings are reflected in its revised report, dated August 20, 2013.

3. The auditors' initial report showed principal contributions owed to the Welfare, Pension, Training, LMCC, CCA and LECET funds and for Union dues in the total amount of $18, 929.63, plus previous late charges assessed at $1, 346.15. A copy of the audit report was sent to the Company with a letter demanding payment for the audit findings. Subsequently, the Company presented objections to the audit findings, and, after due consideration and a review of additional information, the Funds agreed to revise down the audit. The revised audit is attached to the plaintiffs' motion as Exhibit B and shows the principal contributions owed to the Welfare, Pension, Training, LMCC, CCA and LECET funds, and for Union dues in the total amount of $14, 369.95, plus the previously unpaid late charges assessed at $2, 692.30.

4. Based on the revised audit, I prepared a summary report which is attached to the plaintiffs' motion as Exhibit C, reflecting the principal contributions, union dues, liquidated damages, accumulated penalties, accumulated interest, and audit costs that the Company owes pursuant to its Collective Bargaining Agreement and the respective Trust Agreements. According to these Agreements, the Funds are entitled to liquidated damages at the rate of twenty (20) percent of the amount owed in principal contributions to the Pension, Welfare, Training funds, and at the rate of ten (10) percent of the amount owed in principal contributions to the LMCC, CCA and LECET funds and for Union dues. Thus, $2, 727.29 is owed for liquidated damages due to the principal contributions to the Pension, Welfare, and Training funds, and $73.35 is owed for liquidated damages due to amounts owed to the LMCC, CCA and LECET funds and for Union dues.

5. The Funds are also entitled pursuant to its Collective Bargaining Agreement and the respective Trust Agreements to the amount of twelve (12) percent accumulated interest for all amounts owed by the Company to date. I have calculated the accumulated interest owed by the Company through August 31, 2013, and entered the amount of $1, 563.00 owed for the accumulated interest into my summary report, as well as adding the accumulated penalty amount of $2, 692.00 for the previously assessed, but as yet unpaid late charges. My summary report is attached to the plaintiffs' motion as Exhibit C with a copy of the Funds' ledger listing the Company's accumulated penalties.

6. The Company has ceased operating, but should it resume operations in the future, the Funds reserve the right to audit the as yet unaudited period from March 1, 2013 in accordance with its Collective Bargaining Agreement and the respective Trust Agreements, and at the direction of the Funds' trustees in regard to collection matters. The Funds may also file a new lawsuit if necessary to collect any additional outstanding amounts owed by the Company.

7. The Company is further obligated pursuant to its Agreements for the audit costs in the amount of $600.00, and also obligated by law for the reasonable attorneys' fees and court costs incurred by the Funds in obtaining judgment in this matter.

FURTHER AFFIANT SAYETH NOT.

Exhibit B

Exhibit D

AFFIDAVIT OF SARA STEWART SCHUMANN

Sara Stewart Schumann, being first duly sworn on oath, deposes and states as follows:

1. I am an associate attorney at the law firm of Allison, Slutsky & Kennedy, P.C., counsel for plaintiffs Laborers' Pension Fund and Laborers' Welfare Fund of the Health and Welfare Department of the Construction and General Laborers' District Council of Chicago and Vicinity (the "Funds") in the action against Salute Concrete, Inc. (the "Company"). This affidavit is submitted to document attorneys' fees and costs incurred by the Laborers' Funds covering the period from December 1, 2012 through August 30, 2013, for work performed in connection with obtaining contributions owed to the Funds.

2. Since December 1, 2012, this firm has billed the Laborers' Funds on an hourly basis for collection services rendered to the Funds, at a rate of $200.00 per hour for shareholders, $175.00 per hour for associates, and $100.00 per hour for clerks/paralegals. In this cause records kept for legal work on this matter were kept contemporaneously and the fee report is attached hereto.

3. This fee report is attached hereto as Exhibit D1 and sets forth the time expended from December 1, 2011 through August 1, 2013, by the firm's attorneys and paralegals in this matter. The billable entries were reviewed, and any duplicate entries were struck. As set forth in Exhibit D1, the Laborers' Funds have incurred legal fees to my firm in this matter in the amount of $4, 480.00

4. In addition, the Laborers' Funds have incurred court costs in the prosecution of this matter totaling $420.00, which consists of filing fees, and fees for service of process.


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